Indemnity Insurance of Maisonette Lender conveyancing requirements
Yorkshire Building Society and Godiva Mortgages, in common with the majority of mortgage companies, set their own specific instructions when it comes to maisonette indemnity insurance. The content herein aims to help property law firms on the numerous mortgage company solicitors panel where the title to be charged incorporates maisonette. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, be it Nationwide, Lloyds TSB or Coventry BS. The content on this page is not focused on maisonette indemnity insurance requirements.
Need help with maisonette indemnity insurance from your lender?
Chelsea BS and Virgin Money as with the majority of banks, requirements are that where maisonette indemnity insurance is to be put on risk:
- the maisonette indemnity insurance policy should be placed on risk at no cost to the lender
- your practice is required to reveal to the insurer all relevant information which you have gathered
- the maisonette indemnity insurance policy should not contain conditions that you recognise would invalidate or compromise the interests of the mortgage company
- the maisonette indemnity insurance policy must be for the benefit of the bank and, wherever possible, for the benefit of the borrower and any future registered proprietor or mortgage company. If the mortgagor will not be covered by the maisonette indemnity insurance policy, you must advise the mortgagor of this fact.
- your firm are responsible for approving the terms of the maisonette policy on behalf of the bank
- your firm must supply a duplicate of the maisonette indemnity insurance to the borrower and explain to the borrower why the maisonette indemnity insurance policy was effected and that a further policy might be mandatory if there is further borrowing against the mortgaged property
- your practice is duty bound to explain to the borrower that the borrower must adhere to any conditions of the maisonette indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in respect of the insurance
- the limit of indemnity must meet the requirements for the lender (See Part II Handbook requirements )
| Lender | Requirement |
|---|---|
| Accord Mortgages | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Atom Bank | At least the open market value of the property according to the valuation report. |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Chelsea Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Coutts & Co | The open market value of the property according to the valuation report. |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Landmark | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| Lloyds Bank Private Banking | Not less than the Facility plus 10%. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Magellan Homeloans | At least equal to the value of the property |
| Metro Bank | The open market value of the property according to the valuation report. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express (No 2) | |
| National Westminster Bank | An amount equal to the value of the property. |
| St James Place | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| Yorkshire Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
Non lender-specific considerations
The extent of the terms for maisonette indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners should direct your non-lender client to the maisonette indemnity insurance policy paperwork. Maisonette indemnity insurance is devised to provide indemnity in respect of the risks specified in the policy schedule - so it is essential check the document to ensure it is correct. The duration of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Significant features and benefits of maisonette indemnity insurance :
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the maisonette indemnity insurance schedule. Maisonette indemnity insurance Cover normally includes- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Reimbursement for compensation incurred in any action in respect of the risks specified in the maisonette indemnity insurance, as well as legal and associated costs.
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the maisonette indemnity insurance, to the extent that such costs are rendered abortive by court order.
- The out of pocket expenses of altering or destroying all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- All sums paid with the written consent of the insurance company to liberate the property from the risks specified in the maisonette indemnity insurance.
- Market value reduction due to the successful enforcement of the risks specified in the maisonette insurance.
As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the maisonette policy will not be valid.
Maisonette Indemnity Insurance has limitations - Supplemental considerations
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from maisonette insurance may be adequate for your client. Information contained within this webpage is for general information for Regulated law firms in England and Wales on the the bank approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most maisonette Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.